It would shock you to know that the Samsung Galaxy S5 which launched last week in numerous countries around the globe, costs around $256 to manufacture according to a report by market research firm IHS, and yet is was actually announced to be retailed at $660 without a contract and that’s a 60% increase on the price.
Andrew Rassweiler, an analyst at IHS, says that there’s nothing too exciting inside the Galaxy S5 hardware-wise. “There’s no breakthroughs, there’s nothing earth-shattering. It’s really just a continuation of what has come before.”
According to the report, the most expensive part in the Galaxy S5 is the 5.1-inch 1080p Super AMOLED panel, which IHS estimates costs around $63. Samsung-made LPDDR3 RAM and NAND costs a combined $33, while the heart rate monitor on the rear from Maxium costs just $1.45. It’s no surprise to learn that the swipe fingerprint sensor in the Galaxy S5, at a cost of $4, is much cheaper than the iPhone 5s’ static fingerprint sensor, which costs an estimated $15.
The bill of materials includes an estimated cost of assembly ($5), but doesn’t take into account the cost of engineering, software development, distribution, or marketing. All of these aspects will take a sizable chunk out of the $404 Samsung is left with from each Galaxy S5 sold after hardware costs are taken into account.
In comparison, the iPhone 5S costs an estimated $199 to build, and retails for $649.
We live in a capitalist world and we must understand it as such…the motive of all gadgets manufacturers is profit and I would not be surprised if that phone retails for $1,000.
Sometimes, believe me, it’s all hype!
You are right pal. Profit is one thing those manufacturers have in mind. But that difference is quite alarming. Anyway, thanks for your contribution. Hope you’ve registered an account down here.
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I was wondering if you didn’t disable comments on your blog?
This is really shocking! What a wide difference! At least they should have gone for $400 and even that more than a $100 profit per unit we are talking off here.
It’s no wonder Samsung keeps pumping out a new phone every year and a half or so. It’s almost impossible for these guys to operate at a loss!
Great stuff, Oscar; you’re always on top of everything.
Thanks Elvis. 🙂